Wider Vs. European Peers On Syndication Announcement

Gilt futures sit +10 or so, showing around 100.50. That leaves the contract within the confines of yesterday’s range, operating between 100.23-62 thus far. Familiar technical parameters remain untouched.

• Cash gilt yields are 1-2bp lower across the curve.
• Tailwinds for core global FI markets have seemingly stemmed from the continuation of the trend in impressive demand seen in the early rounds of ’24 EGB syndications.
• This has provided some background support for gilts, although the announcement of a Jul-54 gilt syndication (for week commencing 22 Jan) has promoted some widening pressure for long end UK paper vs. core/semi-core European peers and capped local rallies.
• The latest 3-year gilt auction generated strong demand metrics, akin to yesterday’s longer dated offering.
• SONIA futures are -2.0 to +4.0 through the blues.
• BoE-dated OIS is little changed to 1.5bp firmer on the day, showing ~122bp of cuts through ’24.
• A reminder that BoE Governor Bailey will appear in front of a Treasury Select hearing on the recently released Financial Stability Report this afternoon.